The demand for the yarn-dyed market recovers slowly, and recovery will take time

In the past month, domestic and foreign cotton prices and spot prices have increased; the overall yarn market has been sluggish, and the prices of pure cotton yarns have continued to fall, which has narrowed down from the previous month; Lower, prices fall.

1. Raw material market

Since mid-April 2020, domestic and overseas cotton market prices have rebounded due to factors such as the continuous improvement of domestic epidemics and the slight relaxation of foreign epidemics. On May 14, the average spot price of domestic 3128B cotton was 11,770 yuan / ton, an increase of 260 yuan / ton from the same period last month. According to the statistics of China Cotton Association, about 50% of the raw material inventory of textile enterprises is more than one month. The overall downturn in the yarn market, the cotton yarn market continued to be light, and prices continued to decline. The decline of conventional cotton yarns was around 400 yuan / ton, and the high-count cotton yarns fell by about 900 yuan / ton, both of which were lower than last month. narrow. According to the investigation, in order to alleviate the pressure of cash flow, some textile companies choose to buy goods at low prices, to destock and insure the cost.

2. Yarn-dyed market

Since mid-April, the overseas epidemic situation has continued, the physical stores of major foreign brands have been shut down one after another, the demand in overseas markets is weak, the orders of export-oriented yarn-dyed fabric companies are continuously shrinking, and the pressure on product inventory is increasing. It is understood that 75% of the surveyed enterprises indicated that the export order volume was less than half of the normal level, and the follow-up orders were seriously insufficient. The capacity utilization rate of enterprises is about 65% on average, a decrease of 10% compared with the same period last month. Due to the delay in the payment of foreign customers, 85% of the surveyed companies said that the product inventory was at least one month, and the capital chain was under greater pressure.

In terms of prices, due to the continued decline in cotton yarn prices, the slow recovery in the end market demand, the overall weakness of the yarn-dyed market, the product prices fell slightly, and profit margins were squeezed.

In order to alleviate the pressure of insufficient orders, improve production efficiency, and reduce enterprise costs, more than 80% of the surveyed enterprises have implemented the employee rotation system, adjusted the working hours of auxiliary employees, and reasonably arranged the opening rate. During the May 1st long holiday period, companies often choose to take vacations or extend holidays. Some domestic sales companies indicated that they faced heavy resistance and fierce competition, and the sales effect in the short term was not obvious.

3. Outlook

On May 14, the Standing Committee of the Political Bureau of the Central Committee of the Communist Party of China held a meeting and pointed out that it is necessary to deepen the supply-side structural reform, give full play to China's ultra-large-scale market advantage and domestic demand potential, and build a new development pattern of mutual promotion of domestic and international double cycles. On the premise of doing a good job in the prevention and control of normal epidemic situation, continue to focus on key industrial chains, leading enterprises, and major investment projects, open up plugging points, connecting breakpoints, strengthen factor guarantees, and promote upstream and downstream, production, supply and marketing, and large and medium-sized enterprises to work together Production. Regarding the market outlook, the surveyed companies said that although many countries in Europe and the United States plan to lift the state of emergency or relax border control and actively resume production and production, the market will fully recover and it will take time, and most of them hold a wait-and-see attitude.